i did not get answer for the question
in Algebra 1 Answers by

Your answer

Your name to display (optional):
Privacy: Your email address will only be used for sending these notifications.
Anti-spam verification:
To avoid this verification in future, please log in or register.

1 Answer

We can work out the growth rates for 1, 2 and 5 years at 7.1% per annum compounded quarterly.

The quarterly rate is 7.1/4=1.775%.

Growth rates:

1 yr: 1.01775⁴=1.0729 approx

2 yr: 1.01775⁸=1.1511 approx

5 yr: 1.01775²⁰=1.4217 approx

We can apply the growth rates to any of the amounts.

To pay off $4075 in 2 years’ time would have needed an investment of 4075/1.1511=$3539.96 now. In a year’s time this would grow to 3539.96(1.0729)=$3798.07.

To pay off $6725 in 5 years’ time would have needed an investment of 6725/1.4217=$4730.10 now. In a year’s time this would grow to 4730.10(1.0729)=$5074.98.

Therefore the total amount to be paid in a year’s time is 3798.07+5074.98=$8873.05.

This calculation takes into account the fact that the debts are paid early so the amounts to be paid are correspondingly reduced from $10800.

The graph illustrates the calculation.

by Top Rated User (627k points)

Related questions

Welcome to MathHomeworkAnswers.org, where students, teachers and math enthusiasts can ask and answer any math question. Get help and answers to any math problem including algebra, trigonometry, geometry, calculus, trigonometry, fractions, solving expression, simplifying expressions and more. Get answers to math questions. Help is always 100% free!
82,540 questions
87,097 answers
3,667 users